As I'm not at liberty to apply
reasoned analysis across the whole spectrum of the globe's financial
difficulties, perhaps a satisfactory vantage may be gleaned from a regional
analysis. Readers in America will no doubt observe many of the similarities that
exist between the Irish economic meltdown and the lax regulation which
accompanied the implosion of the sub-prime market - not least of which being the
expectation that house prices would continue indefinitely on an upward
trajectory. The packaging of collateralised debt obligations (CDO's) under a
Triple AAA rating also corresponds well with the lack of oversight that existed
in the Irish construction industry; we too had the equivalent of irresponsible
ratings agencies which further fuelled a speculative bubble. Many commentators
make the point that at the heart of our current financial difficulties lies the
actions (or inactions) of irresponsible governments and in Ireland at least you
won't find too many dissenting voices to that thesis.
However, I haven't the slightest doubt that were Fine Gael/Labour (the then opposition) in the position that Fianna Fail were in (the then government), say from 2000 onwards, they would have adopted very similar policies. This was when there was evidence of a slowdown in other sectors and the construction industry was seen as the lynchpin of the economy. It continued to receive it's impetus for growth through tax concessions and further deregulation eventually employing up to one in six Irish workers - the retrospective wisdom is that the housing, retail and construction market was top heavy and should have been reigned in early, yet if this policy choice was a transparently poor decision, I can recall very little by way of objections made by opposition figures right up to the implosion of the banking sector in 2008.
Everyone becomes wise after the event do they not?
The fact of the matter was that for the period 01-08, revenues from the construction industry kept the mirage of the Celtic Tiger 'economic miracle' going - I can recall few economists drawing attention specifically and consistently to this weakness and in fact there was no greater cheerleader of government policy then our two most respectable broadsheets - The Irish Times and The Irish Independent - whose Property Supplement pages were swollen week in, week out with all manner of inducements and cajolings for potential investors. Not only that but the majority of responsible journalists throughout this period were actively encouraging investors by depicting the whole property express gravy train as virtually without end. The thing about it is, is that the gamble the banks, government and the property developers were making (which was ultimately supported by the ECB as it kept interest rates attractively low in the interbank market) could have conceivably paid off were it not for the implosion of the American subprime property market This put a freeze on liquidity worldwide from the Autumn of 2008 onwards and even though Irish banking CEO's repeated time after time that they didn't have any toxic US mortgage securities on their books (which, as a matter of fact they didn't), this became largely irrelevant as far as the market was concerned as the state of mind at that time was to suspect everybody until proven otherwise.
So, the Irish banks got sucked up in the general collapse of investor confidence which lasted for at least the next twelve months with share prices in the international banking sector falling everywhere - the only difference of course was that Irish banks were leveraged out at ludricous ratios financing long-term construction projects which of course presupposed endless growth. Once credit dried up on account of the global financial crisis and our domestic construction industry contracted as a result, the money was no longer available to finance the ongoing rent and wage bills - workers were laid off and firms quickly went into liquidation or held out in the courts hoping that things would pick up again before being forced to declare bankrupty.
So, here you have it - an unprecedented global international downturn froze the European interbank lending market creating stock market jitters which then exposed Irish banks to more intense investor scrutiny. When it was discovered that they were all proportionally highly exposed to a rapidly collapsing domestic construction, sector investors began bailing out en masse leading to a twenty fold drop in share price in the case of AIB with Bank of Ireland and others not falling to far behind. Hence, the government scheme to provide a blanket bank guarantee to investors and depositors which was lauded at the time by Eurocrats and the leading European financials; 'we were acting on the best advice available at the time' became the mantra of Cowen and Lenihan (Taoiseach and Finance Minister at the time). If they hadn't have acted as they did, so the common wisdom at the time went the effect on the entire economy would have been "disastrous".
So, what have they done that was so irresponsible? - the government in fact were either extraordinarily naive or criminally reckless. When the time came to offer the guarantee they accepted prima facie the evidence from bankers with respect to their level of loan exposure and the amount of leverage they had taken on. It should have been taken as a matter of course that they would be lied to - this is after all, what bankers and investors do for a living. The opposition deputies seemingly alive for the first time to the threat which a blanket guarantee of 400 billion euro might entail for future generations of Irish taxpayers demanded to see the independent recommendations made by banking experts solicited specifically by the government - I remember Labour's Pat Rabbitte trying to get a hold of a copy of a Price Waterhouse Cooper report which the govt. had consulted (but to no avail) and the guarantee was swept through the parliament in a matter of days - time being of the essence to 'save the Irish economy from disaster'.
It's pretty hard to imagine how it could have been any worse then it is at present were the banks simply allowed to crash and burn. You take a look at the American bailout package of $1.4 trillion which is roughly a tenth of the US economy - this corresponded to the prevailing economic wisdom endorsed by most high profile luminaries. Both the Obama and McCain presidential campaigns ground to a halt in the weeks leading up to the Congress vote on this 'stimulus package' and all parties were of the opinion that the Wall Steet financial powerhouses were 'too big to fail' - Bernanke and Paulson led the chorus and international consensus among policymakers was that they had done the right thing; this was a cross-sectional bailout which amounted to roughly 10% of US GDP and was the model which was confidently adopted by Irish policymakers a short time later and which furthermore received the endorsement of the EU Central Bank.
But look at what's happened here; the three most troubled banks in Ireland were AIB, Bank of Ireland and Anglo-Irish Bank. Whereas there may be a convincing argument that the failure of the first two represented as Brian Lenihan called it "a systemic risk of failure" it is by no means conclusive or has been established that this is the case with Anglo-Irish. AIB and Bank of Ireland have branches in every town and village up and down the country - they are the lender of first resort for every ordinary Irish worker, yet Anglo-Irish is geared towards a very specific investment profile; it is almost entirely concerned with lending in the high end of the property market - I have never even seen a branch of it and no-one I know has any money invested in it. Yet, this bank alone accounts for some 40 billion euro which has been ploughed into it to keep it afloat by the Irish taxpayer - a figure which represents some 35% of the country's GDP!
Think about that - it's absolutely astonishing - a single bank run by half a dozen gormless cretins has been allowed to bring an entire country to it's knees and when the bank guarantee was offered, no-one in Fianna Fail thought to suspend the extension of this privilige in lieu of a proper and thorough audit of its books (the nature of which of course the directors of Anglo lied about from beginning to end).
Extraordinary.
And no analysis of the property fever over here would be complete without mentioning the innate greed, snobbery and one-upmanship which characterised the entire speculative rush from middle classes, working classes, professionals and non-professionals alike. The Irish are great for pointing fingers at the politicians (who nevertheless behaved appallingly by any standards) but of course less likely to indulge in a bit of self-analysis - for every property developer clocking up his paper millions there were a dozen at least wannabees trying to board the property market; not just for one or two extra houses but entire estates and of course for extra properties in Bulgaria, Poland and elsewhere on the continent.
The banks of course were implicit in the rush from the outset posting out letters to any who had any sort of a disposable income and cajoling them into taking out all sorts of unadvisable loans - all of us are wise in retrospect of course but we kept on voting Fianna Fail back into power on the expectation that precisely this kind of spending splurge would be allowed to continue. Some of the worst cowboys in the Irish Dail are the exact mirror-image counterparts of the mentality of the electorate that placed them there, thus we deserve everything we get, voting in thieves and scoundrels time after time. We pride ourself on our ability to dodge red tape - it's almost a badge of honour to bullshit our way through life cutting corners and the most accomplished of us are in the Dail doing precisely that on a daily basis.
We had a long series of tribunals here to unearth corruption in the planning process for hocking off state assets during the 80's and they wound up eventually with the conclusion that it was so widespread it may well be referred to as a 'culture of corruption' - the practice was so indelibly etched into the fabric of Irish life it was nigh pointless to proceed with prosecutions for where could it possibly stop? Everyone was guilty by association it seemed. And let's not start on corruption and wastage in semi-state bodies and the merry go round of political appointees to lucrative directorships Of course you have to have sympathy for those here who by and large are the majority who simply put their heads down throughout this period and done an honest day's labour only to find now their in negative equity, paying higher taxes, struggling to hold down their jobs or else seeing their kids repeat the cycle of emigration as there's nothing here to offer them any more - but, on the whole, we deserved everything we got.
Crucially, Ireland needs to stop the haemorrhaging to international creditors which is where the bulk of the liquidity being injected into Anglo is going - not, as is usually claimed, towards financing their domestic operations or lending into the Irish market. Disconnecting the artificial life support we have on this insolvent, unworkable and criminally conceived financial cesspit is what we need to be doing but that is not the solution that the IMF are going to offer; they will follow the predictable rote prescriptions that constitute their bailouts all over the world, and yes, like in Greece we won't get to see any of the fine details as they "restructure" the banks along with their radioactive loan portfolios. They should let the whole of Anglo go to the wall, lock, stock and barrel.
We are collectively paying back 100 billion euro in loans secured by that idiot mastermind Sean Fitzpatrick - suave purveyor of pure fantasies (which just about every Irishman indulged in to some extent or another) - but secured that is, from the ECB itself via the interbank market and now packaged and held by NAMA in the vain expectation that there'll be an upturn in the property market. What a risible misconception this was now that we have the benefit of hindsight as every property developer on NAMA's books is sitting tight on their little castles and ghost estates which are peppered across the country like so many landmarks to folly waiting for that spark of elixir that will shock the economy out of its inescapably rigomortic compass, while the exchequer picks up the tab for their insane spending spree.
We have invested, or rather, we have been forced to invest in a series of rotten corporate holdings, empty Enron-like shells that would be cannibalised in a firesale merger frenzy in the real world and of which we know absolutely nothing about and what we do know, or were told, it now transpires, was a series of lies and evasions designed to boost their investability and inspire 'market confidence'. We've ploughed thirty billion euro into Anglo in less than two years all predicated on the gamble that there will be an upturn while the property developers stuff the courts with petitions to stave off repossessions.
The 15 billion in cuts offered in the budgetary 'four year plan' also assumes there will be growth of 1.5% next year - another big "if" given that householders will be like constipated squirrels trying to hold on to their jobs, their mortgages and even their sanity - we are already in need of collective therapy. So, here we are paying 15 billion euro a year to anonymous international creditors who believed the cajolings of our resident lunatic Sean Fitzpatrick that Ireland. Inc was an unstoppable property express while we claw each other's eyes out (Student's protests, SIPTU demos, the Croke Park ‘agreement‘) over pensions, welfare and public sector pay, the maximum yields from which across the board via cuts in all of them (say 30%) would still only net us a fraction of what we are prepared to pay back to Anglo's investors, who are, after all, caveat emptor - wheelers and dealers in a free market and must be prepared, indeed told, that it is time for them to bite the bullet.
We already introduced a bank guarantee scheme in September of 08 but this doesn't mean we are stuck with it as, theoretically at least, a new government could reverse the bailout. This isn't likely to happen however as the most radical proposals among the opposition are for revisiting the terms of the bailouts for only one of them - Anglo-Irish Bank. This bank has been the real albatross around Ireland’s neck and accounts for 30 billion of the estimated 50 billion euro which bank bailouts have so far cost us. When you consider that Ireland's GDP last year was 155 billion euro and exchequer receipts were in the region of 55 billion euro, this represents proportionally the most costly corporate bailout in history - not just in Ireland, but in the world. The two other major recipients of government funding were AIB and the Bank of Ireland - between them accounting for the bulk of the rest of the 20 billion spent on bailouts. There is a big difference however in the lending and depositor profiles of these latter two banks which have branches in every town and village across the country; they are inextricably tied to every facet of the Irish economy absorbing the savings and interests of ordinary Irish workers, small business and retailers. Of course they also have significant corporate depositers and shareholders but not to the same extent as Anglo-Irish whose investment portfolio was tailored almost exclusively towards to the property market, funding loans for property developers, land speculators and so on.
Now, it's not merely Anglo's culpability in mushrooming the property bubble through reckless unregulated lending - the other banks certainly had their share of that - but it's the fact that their peculiar chosen niche has left a question mark over whether or not allowing them to go the wall represented a sufficiently high risk of 'systemic damage'. Brian Lenihan, the finance minister, at the time maintained that Anglo had such integral links with the economy as a whole that allowing it to implode a-la Lehman would represent an immediate liability to the tune of 60 billion euro, yet no detailed breakdown or analysis was ever provided to justify this assertion. Now, back in January 09 after the bank guarantee scheme, which only ever secured pre-existing deposits across the banking sector, there was a bill rushed through the Irish parliament to nationalise what would turn out to be this insatiable black hole. The opposition (who were all along unanimous in support of the necessity of a banking bailout in principal but were nevertheless measured in approving blanket guarantees) weren't given sufficient time to analyse the particular merits of extending the scheme to include Anglo.
Now, at the time, Brian Lenihan supplied figures regarding the number and nationality of corporate and retail deposits quoting liberally from a specially commissioned Price Waterhouse Coopers report but this report was never made publicly available due 'to the sensitive nature' of the information and so the opposition was never in a position to credibly assess the necessity of nationalising this financial cesspit. Prior to this fatally rushed piece of legislation, the only monies injected into Anglo were in the form of recapitalisation loans which it was hoped would get the thing lending again - and into what market and for what purpose it may be asked as its specialist niche the property market had already crashed.
So we may certainly ask about the nature of the advice received and from what quarters which asserted that Anglo had the same kind and degree of systemic risks as borne by AIB and Bank of Ireland but this I fear will never become a question for public prosecutors to decide as the trail of this imbroglio only leads straight back to Brussels and the heart of EU policy planning. Let's see now how much fire is in people's bellies for protest when the real round of austerity comes in. Now that we're completely screwed and the IMF has stepped in to offer their definitive judgement, people have perked up notably as it means the inter-factional blame game can be suspended and we can all adjust ourselves to our medicine dosage; which is what the quibbling appears to be all about at the minute.
Overall, the global financial crisis may be characterised as a shocking neoliberal wave that's crashed on deck and tipped us all over. Do we flip her over and set sail again in this condition or do we swim ashore and build a bigger, sturdier boat? While we're at it maybe we should refuse to budge altogether; have us an auld campfire and sing a few songs. Take time out and neutralise this whole growth and expansion panacea - 'stability' as opposed to the delusion of non-stop growth does seem good for a while in light of resource depletion.
Who knows, underneath it all according to some undetectable logic the planet may be just groaning 'no'.
However, I haven't the slightest doubt that were Fine Gael/Labour (the then opposition) in the position that Fianna Fail were in (the then government), say from 2000 onwards, they would have adopted very similar policies. This was when there was evidence of a slowdown in other sectors and the construction industry was seen as the lynchpin of the economy. It continued to receive it's impetus for growth through tax concessions and further deregulation eventually employing up to one in six Irish workers - the retrospective wisdom is that the housing, retail and construction market was top heavy and should have been reigned in early, yet if this policy choice was a transparently poor decision, I can recall very little by way of objections made by opposition figures right up to the implosion of the banking sector in 2008.
Everyone becomes wise after the event do they not?
The fact of the matter was that for the period 01-08, revenues from the construction industry kept the mirage of the Celtic Tiger 'economic miracle' going - I can recall few economists drawing attention specifically and consistently to this weakness and in fact there was no greater cheerleader of government policy then our two most respectable broadsheets - The Irish Times and The Irish Independent - whose Property Supplement pages were swollen week in, week out with all manner of inducements and cajolings for potential investors. Not only that but the majority of responsible journalists throughout this period were actively encouraging investors by depicting the whole property express gravy train as virtually without end. The thing about it is, is that the gamble the banks, government and the property developers were making (which was ultimately supported by the ECB as it kept interest rates attractively low in the interbank market) could have conceivably paid off were it not for the implosion of the American subprime property market This put a freeze on liquidity worldwide from the Autumn of 2008 onwards and even though Irish banking CEO's repeated time after time that they didn't have any toxic US mortgage securities on their books (which, as a matter of fact they didn't), this became largely irrelevant as far as the market was concerned as the state of mind at that time was to suspect everybody until proven otherwise.
So, the Irish banks got sucked up in the general collapse of investor confidence which lasted for at least the next twelve months with share prices in the international banking sector falling everywhere - the only difference of course was that Irish banks were leveraged out at ludricous ratios financing long-term construction projects which of course presupposed endless growth. Once credit dried up on account of the global financial crisis and our domestic construction industry contracted as a result, the money was no longer available to finance the ongoing rent and wage bills - workers were laid off and firms quickly went into liquidation or held out in the courts hoping that things would pick up again before being forced to declare bankrupty.
So, here you have it - an unprecedented global international downturn froze the European interbank lending market creating stock market jitters which then exposed Irish banks to more intense investor scrutiny. When it was discovered that they were all proportionally highly exposed to a rapidly collapsing domestic construction, sector investors began bailing out en masse leading to a twenty fold drop in share price in the case of AIB with Bank of Ireland and others not falling to far behind. Hence, the government scheme to provide a blanket bank guarantee to investors and depositors which was lauded at the time by Eurocrats and the leading European financials; 'we were acting on the best advice available at the time' became the mantra of Cowen and Lenihan (Taoiseach and Finance Minister at the time). If they hadn't have acted as they did, so the common wisdom at the time went the effect on the entire economy would have been "disastrous".
So, what have they done that was so irresponsible? - the government in fact were either extraordinarily naive or criminally reckless. When the time came to offer the guarantee they accepted prima facie the evidence from bankers with respect to their level of loan exposure and the amount of leverage they had taken on. It should have been taken as a matter of course that they would be lied to - this is after all, what bankers and investors do for a living. The opposition deputies seemingly alive for the first time to the threat which a blanket guarantee of 400 billion euro might entail for future generations of Irish taxpayers demanded to see the independent recommendations made by banking experts solicited specifically by the government - I remember Labour's Pat Rabbitte trying to get a hold of a copy of a Price Waterhouse Cooper report which the govt. had consulted (but to no avail) and the guarantee was swept through the parliament in a matter of days - time being of the essence to 'save the Irish economy from disaster'.
It's pretty hard to imagine how it could have been any worse then it is at present were the banks simply allowed to crash and burn. You take a look at the American bailout package of $1.4 trillion which is roughly a tenth of the US economy - this corresponded to the prevailing economic wisdom endorsed by most high profile luminaries. Both the Obama and McCain presidential campaigns ground to a halt in the weeks leading up to the Congress vote on this 'stimulus package' and all parties were of the opinion that the Wall Steet financial powerhouses were 'too big to fail' - Bernanke and Paulson led the chorus and international consensus among policymakers was that they had done the right thing; this was a cross-sectional bailout which amounted to roughly 10% of US GDP and was the model which was confidently adopted by Irish policymakers a short time later and which furthermore received the endorsement of the EU Central Bank.
But look at what's happened here; the three most troubled banks in Ireland were AIB, Bank of Ireland and Anglo-Irish Bank. Whereas there may be a convincing argument that the failure of the first two represented as Brian Lenihan called it "a systemic risk of failure" it is by no means conclusive or has been established that this is the case with Anglo-Irish. AIB and Bank of Ireland have branches in every town and village up and down the country - they are the lender of first resort for every ordinary Irish worker, yet Anglo-Irish is geared towards a very specific investment profile; it is almost entirely concerned with lending in the high end of the property market - I have never even seen a branch of it and no-one I know has any money invested in it. Yet, this bank alone accounts for some 40 billion euro which has been ploughed into it to keep it afloat by the Irish taxpayer - a figure which represents some 35% of the country's GDP!
Think about that - it's absolutely astonishing - a single bank run by half a dozen gormless cretins has been allowed to bring an entire country to it's knees and when the bank guarantee was offered, no-one in Fianna Fail thought to suspend the extension of this privilige in lieu of a proper and thorough audit of its books (the nature of which of course the directors of Anglo lied about from beginning to end).
Extraordinary.
And no analysis of the property fever over here would be complete without mentioning the innate greed, snobbery and one-upmanship which characterised the entire speculative rush from middle classes, working classes, professionals and non-professionals alike. The Irish are great for pointing fingers at the politicians (who nevertheless behaved appallingly by any standards) but of course less likely to indulge in a bit of self-analysis - for every property developer clocking up his paper millions there were a dozen at least wannabees trying to board the property market; not just for one or two extra houses but entire estates and of course for extra properties in Bulgaria, Poland and elsewhere on the continent.
The banks of course were implicit in the rush from the outset posting out letters to any who had any sort of a disposable income and cajoling them into taking out all sorts of unadvisable loans - all of us are wise in retrospect of course but we kept on voting Fianna Fail back into power on the expectation that precisely this kind of spending splurge would be allowed to continue. Some of the worst cowboys in the Irish Dail are the exact mirror-image counterparts of the mentality of the electorate that placed them there, thus we deserve everything we get, voting in thieves and scoundrels time after time. We pride ourself on our ability to dodge red tape - it's almost a badge of honour to bullshit our way through life cutting corners and the most accomplished of us are in the Dail doing precisely that on a daily basis.
We had a long series of tribunals here to unearth corruption in the planning process for hocking off state assets during the 80's and they wound up eventually with the conclusion that it was so widespread it may well be referred to as a 'culture of corruption' - the practice was so indelibly etched into the fabric of Irish life it was nigh pointless to proceed with prosecutions for where could it possibly stop? Everyone was guilty by association it seemed. And let's not start on corruption and wastage in semi-state bodies and the merry go round of political appointees to lucrative directorships Of course you have to have sympathy for those here who by and large are the majority who simply put their heads down throughout this period and done an honest day's labour only to find now their in negative equity, paying higher taxes, struggling to hold down their jobs or else seeing their kids repeat the cycle of emigration as there's nothing here to offer them any more - but, on the whole, we deserved everything we got.
Crucially, Ireland needs to stop the haemorrhaging to international creditors which is where the bulk of the liquidity being injected into Anglo is going - not, as is usually claimed, towards financing their domestic operations or lending into the Irish market. Disconnecting the artificial life support we have on this insolvent, unworkable and criminally conceived financial cesspit is what we need to be doing but that is not the solution that the IMF are going to offer; they will follow the predictable rote prescriptions that constitute their bailouts all over the world, and yes, like in Greece we won't get to see any of the fine details as they "restructure" the banks along with their radioactive loan portfolios. They should let the whole of Anglo go to the wall, lock, stock and barrel.
We are collectively paying back 100 billion euro in loans secured by that idiot mastermind Sean Fitzpatrick - suave purveyor of pure fantasies (which just about every Irishman indulged in to some extent or another) - but secured that is, from the ECB itself via the interbank market and now packaged and held by NAMA in the vain expectation that there'll be an upturn in the property market. What a risible misconception this was now that we have the benefit of hindsight as every property developer on NAMA's books is sitting tight on their little castles and ghost estates which are peppered across the country like so many landmarks to folly waiting for that spark of elixir that will shock the economy out of its inescapably rigomortic compass, while the exchequer picks up the tab for their insane spending spree.
We have invested, or rather, we have been forced to invest in a series of rotten corporate holdings, empty Enron-like shells that would be cannibalised in a firesale merger frenzy in the real world and of which we know absolutely nothing about and what we do know, or were told, it now transpires, was a series of lies and evasions designed to boost their investability and inspire 'market confidence'. We've ploughed thirty billion euro into Anglo in less than two years all predicated on the gamble that there will be an upturn while the property developers stuff the courts with petitions to stave off repossessions.
The 15 billion in cuts offered in the budgetary 'four year plan' also assumes there will be growth of 1.5% next year - another big "if" given that householders will be like constipated squirrels trying to hold on to their jobs, their mortgages and even their sanity - we are already in need of collective therapy. So, here we are paying 15 billion euro a year to anonymous international creditors who believed the cajolings of our resident lunatic Sean Fitzpatrick that Ireland. Inc was an unstoppable property express while we claw each other's eyes out (Student's protests, SIPTU demos, the Croke Park ‘agreement‘) over pensions, welfare and public sector pay, the maximum yields from which across the board via cuts in all of them (say 30%) would still only net us a fraction of what we are prepared to pay back to Anglo's investors, who are, after all, caveat emptor - wheelers and dealers in a free market and must be prepared, indeed told, that it is time for them to bite the bullet.
We already introduced a bank guarantee scheme in September of 08 but this doesn't mean we are stuck with it as, theoretically at least, a new government could reverse the bailout. This isn't likely to happen however as the most radical proposals among the opposition are for revisiting the terms of the bailouts for only one of them - Anglo-Irish Bank. This bank has been the real albatross around Ireland’s neck and accounts for 30 billion of the estimated 50 billion euro which bank bailouts have so far cost us. When you consider that Ireland's GDP last year was 155 billion euro and exchequer receipts were in the region of 55 billion euro, this represents proportionally the most costly corporate bailout in history - not just in Ireland, but in the world. The two other major recipients of government funding were AIB and the Bank of Ireland - between them accounting for the bulk of the rest of the 20 billion spent on bailouts. There is a big difference however in the lending and depositor profiles of these latter two banks which have branches in every town and village across the country; they are inextricably tied to every facet of the Irish economy absorbing the savings and interests of ordinary Irish workers, small business and retailers. Of course they also have significant corporate depositers and shareholders but not to the same extent as Anglo-Irish whose investment portfolio was tailored almost exclusively towards to the property market, funding loans for property developers, land speculators and so on.
Now, it's not merely Anglo's culpability in mushrooming the property bubble through reckless unregulated lending - the other banks certainly had their share of that - but it's the fact that their peculiar chosen niche has left a question mark over whether or not allowing them to go the wall represented a sufficiently high risk of 'systemic damage'. Brian Lenihan, the finance minister, at the time maintained that Anglo had such integral links with the economy as a whole that allowing it to implode a-la Lehman would represent an immediate liability to the tune of 60 billion euro, yet no detailed breakdown or analysis was ever provided to justify this assertion. Now, back in January 09 after the bank guarantee scheme, which only ever secured pre-existing deposits across the banking sector, there was a bill rushed through the Irish parliament to nationalise what would turn out to be this insatiable black hole. The opposition (who were all along unanimous in support of the necessity of a banking bailout in principal but were nevertheless measured in approving blanket guarantees) weren't given sufficient time to analyse the particular merits of extending the scheme to include Anglo.
Now, at the time, Brian Lenihan supplied figures regarding the number and nationality of corporate and retail deposits quoting liberally from a specially commissioned Price Waterhouse Coopers report but this report was never made publicly available due 'to the sensitive nature' of the information and so the opposition was never in a position to credibly assess the necessity of nationalising this financial cesspit. Prior to this fatally rushed piece of legislation, the only monies injected into Anglo were in the form of recapitalisation loans which it was hoped would get the thing lending again - and into what market and for what purpose it may be asked as its specialist niche the property market had already crashed.
So we may certainly ask about the nature of the advice received and from what quarters which asserted that Anglo had the same kind and degree of systemic risks as borne by AIB and Bank of Ireland but this I fear will never become a question for public prosecutors to decide as the trail of this imbroglio only leads straight back to Brussels and the heart of EU policy planning. Let's see now how much fire is in people's bellies for protest when the real round of austerity comes in. Now that we're completely screwed and the IMF has stepped in to offer their definitive judgement, people have perked up notably as it means the inter-factional blame game can be suspended and we can all adjust ourselves to our medicine dosage; which is what the quibbling appears to be all about at the minute.
Overall, the global financial crisis may be characterised as a shocking neoliberal wave that's crashed on deck and tipped us all over. Do we flip her over and set sail again in this condition or do we swim ashore and build a bigger, sturdier boat? While we're at it maybe we should refuse to budge altogether; have us an auld campfire and sing a few songs. Take time out and neutralise this whole growth and expansion panacea - 'stability' as opposed to the delusion of non-stop growth does seem good for a while in light of resource depletion.
Who knows, underneath it all according to some undetectable logic the planet may be just groaning 'no'.
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